Why do most business owners focus much more on acquiring new customers than preventing their current customers from leaving? And many times when a customer leaves a business, no one touches base with them to see what needs to be done to bring them back in the fold.
One of the fastest ways your business can generate cash is to locate and win back these lost customers. They already know who you are. At one time they liked your product or service enough to spend money with you. Reactivating them is more cost-efficient than chasing down new clients who have never heard of you or your company.
Consider these statistics from the Harvard Business Review:
–The average company will lose half their customers every 5 years with 2/3 of them stating lack of customer care as the main reason for their dissatisfaction.
–The chances of turning a prospect into a customer is anywhere from 5-20%.
–There is a 20-40% chance to bring back lost customers.
Past customers already know who you are. There is no need to go through all the expensive marketing and advertising needed with someone that has never heard of you.
Here are some specific tactics to win back lost customers:
Develop a Customer Profile
The truth is, there are some customers you don’t want back. Perhaps they cost too much to service, or their “total spend” is not enough to get excited about. Write out a thumbnail sketch of your ideal customer profile. Then sift through your lost customer data to select only those that match your criteria.
Develop A Contact Strategy
There are generally four ways you to reach out to lost customers: email, phone, direct mail and in-person contact. Your results will vary with each. Which method you use may depend on the available customer data. If you only have email addresses, then that is the method to choose.
However, many industries routinely collect physical addresses, email addresses and telephone numbers. If you have this data available, run a pilot program with different contact methods to see which one is the most cost-efficient. Then go ahead and do a full-scale roll out.
Refine The Offer
The most important component of all is the offer. How and what you say to entice lost customers to return will have a bigger impact than the contact method, seasonal timing, or any other factor. Segment lost customers by the reasons you believe they have not returned. Then build an offer that is so irresistible they can’t pass it up.
For example, if you have a group of customers that report they had a bad service experience, show them you now have a special service team just for their region. Or perhaps offer free service for a set period of time. A half-baked or weak offer will not be enough to overcome their reluctance to do business with you. Really show you are ready to go above and beyond to win them back.
Find out from your lost customers what keeps them from returning, address those concerns, and invite them to “come home.” You’ll see instant cash hit your bottom line when they walk in the door.